RBI MPC raises repo rate by 25 bps to 5.50%, changes stance to 'calibrated tightening'
On 7 October 2026, the RBI's Monetary Policy Committee, chaired by Governor Sanjay Malhotra, unanimously raised the policy repo rate by 25 basis points to 5.50% and changed its stance to 'calibrated tightening'; SDF now 5.25% and MSF/Bank Rate 5.75%.
Summary
The Monetary Policy Committee (MPC) of the Reserve Bank of India, at its 63rd meeting held from 5 to 7 October 2026 under Governor Sanjay Malhotra, voted unanimously to raise the policy repo rate by 25 basis points to 5.50%. As a result, the Standing Deposit Facility (SDF) rate is 5.25% and the Marginal Standing Facility (MSF) rate and Bank Rate are 5.75%, and the MPC changed its stance to 'calibrated tightening', with two members (Dr. Nagesh Kumar and Prof. Ram Singh) favouring a neutral stance. The MPC projected real GDP growth for 2026-27 at 7.1% and CPI inflation at 5.2%, citing the West Asia conflict, a deficient monsoon and El Niño risks. The RBI also announced interoperability among NBFC-Account Aggregators and a Technical Consultative Committee for Financial Markets.
Key facts
- Meeting
- 63rd MPC meeting, 5–7 October 2026
- Chair
- RBI Governor Sanjay Malhotra
- Repo rate
- Raised 25 bps to 5.50% (unanimous)
- SDF rate
- 5.25%
- MSF rate & Bank Rate
- 5.75%
- Stance
- Changed to calibrated tightening
- Dissent on stance
- Dr. Nagesh Kumar and Prof. Ram Singh wanted neutral
- GDP 2026-27 (projection)
- 7.1%
- Q1 2026-27 GDP (NSO)
- 7.8%
- CPI inflation 2026-27 (projection)
- 5.2%
- CPI inflation Aug 2026
- 4.8%
- Other measures
- NBFC-Account Aggregator interoperability; Technical Consultative Committee for Financial Markets
- Minutes
- 21 October 2026
- Next MPC meeting
- 2–4 December 2026
Background
The MPC said inflation is no longer benign: headline CPI is expected to average almost 5.8% over the next three quarters and core inflation is projected at 4.4% for 2026-27. Growth projections for 2026-27 are Q2 7.2%, Q3 6.9% and Q4 6.8%.
- NBFC-Account Aggregators will become interoperable, and SEBI-regulated depositories can include bank deposit details in the Consolidated Account Statement (by 31 December 2026).
- A Technical Consultative Committee for Financial Markets will be set up for money, government securities and forex markets.
Static GK: The MPC is constituted under Section 45ZB of the RBI Act, 1934 and has six members: the Governor (Chairperson), the Deputy Governor in charge of monetary policy, one RBI officer nominated by the Central Board and three members appointed by the Central Government.
Practice MCQs 5 questions
In October 2026, the RBI's Monetary Policy Committee raised the policy repo rate to:
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Correct answer: B — 5.50%
At its October 2026 meeting, the RBI MPC changed its monetary policy stance to:
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Correct answer: C — Calibrated tightening
In its October 2026 policy, what CPI inflation did the RBI MPC project for 2026-27?
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Correct answer: A — 5.2%
Consider the following statements about the RBI MPC decision of October 2026: 1. The decision to raise the repo rate was taken unanimously. 2. Two members were of the view that the stance should be retained at neutral. Which of the statements given above is/are correct?
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Correct answer: C — Both 1 and 2
The Monetary Policy Committee of the RBI is constituted under which section of the Reserve Bank of India Act, 1934?
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Correct answer: D — Section 45ZB